CZECH REPUBLIC – BASIC INFORMATION
The Czech Republic is situated in Central Europe and takes the area of 78 867 km2. It is a continental country, 326 km far from the Baltic Sea, and 322 km from the Mediterranean Sea. It has common frontiers with Germany (810 km), Poland (762 km), Austria (466 km), and Slovakia (265 km), respectively. The highest altitude point is the peak of Mt. Sněžka (Snow Mountain, 1603 m above the sea level), and the lowest point is near Hřensko, where the river Labe (Elbe) leaves the territory of the Czech Republic (117 m above the sea level).
FACTS AND DATA
Area: 78 867 km2
Length of State Border: 2 303 km
Number of Residents: 10 500 000 residents
Capital City: Prague (1 300 000 residents)
Population Density: 134 residents / km2
Time Zone: CET
Political System: Parliament Democracy
Member of the EU: sice May 1, 2004
Currency: Czech crown (CZK)
MINISTRY OF AGRICULTURE
The Ministry of Agriculture of the Czech Republic is a central department of state administration, responsible for agriculture, water management, the food industry and forest, hunting and fishing management in the Czech Republic, excluding the areas of national parks.
The Organizational Structure of the Ministry
The Ministry is made up of seven sections, four separate departments. These organs can be divided into two groups according to the nature of their activities.
One group involves organs primarily providing the Ministry’s personnel, organizational, economic and communication agenda: the State Secretary Section, the Legal and Information Technology Section, the Minister’s Office Department, the Security Policy and Crisis Management Department, the Audit and Supervision Department and the Minister’s Cabinet Unit. The second group is made up of specialized departments that are responsible for individual agendas according to the Competence Act. These are the Water Management Section, the Forest Management Section, the Agricultural Commodities, Foreign Relations and Organic Production Section, the EU Funds, Research, Development and Education Section and the Food Production Section – Food Authority.
The Ministry Building
The Ministry of Agriculture is located in Prague’s Těšnov district, in a historical building built in 1928–1932 according to the plans of the architect František Roith. It is a spacious five-storey building in the spirit of modern Classicism that takes up an area equal to an average city block. Every year the building is open to the public on the Open-door Day for Prague’s monuments.
The effort of the Ministry of Agriculture is to create, in collaboration with other responsible government authorities and representatives of the private sector, favourable conditions for increasing exports of Czech agricultural and food products, mainly to countries outside the EU.
Czech International Agrarian Trade (IAT)
The Czech Republic must import many products, especially the so-called uncompetitive commodities (tropical fruits, sea fish, rice, etc.). For these items, the goal is to support the reduction of import tariff rates and to ensure the lowest possible consumer prices.
When it comes to competitive items, i.e. those for which the CR, as a producer, can compete with other countries, it is in the interest of the CR to ensure the strategic degree of national self-sufficiency. In recent years national self-sufficiency has decreased in the case of poultry and pork, fruit and vegetables. To meet the Czech consumption, it needs to be supplemented by imports from abroad.
In the period after 1989, consumer demand increased in the CR, which, among other things, manifests itself in the requirements for a wide selection of agricultural and other products. Thus, the IAT enables the CR to ensure sufficient offering of individual products of Czech and foreign origins (cheeses, sausages, spirits, wine, etc.). In Czech agriculture and the food industry, a number of very good and export-oriented (not only large) enterprises are operational. There are also many examples of good practice in the contractual or direct linkage of activities operating in the “agriculture – food industry – trade” vertical. In addition, the uniqueness and traditions of some Czech products (including their EU-protected geographical indications) and the awareness of the use of agricultural machinery and technological units of Czech origin in the past, assist exports, for example, beer, hops, malt, collagen casings, etc.
The IAT of the CR in the past five years has represented 4.9 – 5.7 % of the total international trade in terms of turnover, and the agrarian export of the CR has amounted to 4.2 – 5.2 % of total exports, which corresponds with the character of the CR as a significantly industrial economy. Despite this low share, which also reflects the position of the agricultural sector in the Czech economy (2.2 % of GDP in the year 2018), IAT, due to the strategic tasks of the state in ensuring national self-sufficiency and meeting domestic consumption, is one of the most sensitive segments of international trade.
In terms of the direction of trade flows, the IAT of the CR shows dominant orientation to the EU market. The share of exports to the EU in the total agrarian exports since 2007 has permanently exceeded 90 %. While exports to the EU during the 2008–2018 period increased by 70 %, the volume of exports to non-EU countries in the same period doubled. The orientation to the EU countries is mainly due to the geographic location of the CR (a landlocked state bordering exclusively with EU member states) and the fact that trading in the EU single market is essentially barrier-free. However, also in this market, Czech food exports are faced with a variety of formal and informal non-tariff trade barriers, which in effect lead to its certain distortions. If the barriers are unjustified, the State initiates their removal.
As regards the commodity structure, in the area of agrarian products the CR exports about 60 % of highly processed products. Almost 70 % these products are exported to third countries. In this context, it is necessary to add that the factor significantly influencing these figures is the export of cigarettes.
Generally, in Czech exports, products of plant origin are more established, which is associated with the development of the structure of Czech agriculture after accession to the EU. Export of goods to third countries is an area with the potential thus far being little utilized. The state, in cooperation with foreign offices of the CR and institutions focused on promoting exports, has started systematically to promote the export interests of Czech food producers in these countries.
The basic role of the State authorities in these markets is necessary with regard to removing trade barriers and assisting Czech entrepreneurs to enter third markets.
In this respect, since 2016 agricultural attachés have been working in selected third countries (Russia, China, Serbia, Libanon and United Arab Emirates). Strengthening the export orientation to a greater number of markets, the so-called third countries, appears to be important, among other things, also in the context of the current political instability and EU market saturation. For the MoA it is also essential to support Czech agricultural and food companies in the participation in international trade fairs and exhibitions, to organize incoming missions of trade partners to the Czech Republic and to promote Czech quality products in B2B meetings abroad.